Exam 9: Business-Type Activities

The FASB mandates that entities report their cash flows from operations using the direct method.

Jay County has designated the General Fund as the single fund to account for its self-insurance activities. What is the maximum amount that can be charged to expenditure in the general fund related to the self-insurance activities?

An electric utility reports both restricted assets and restricted net position, but the amounts are different from each other. What could account for this difference?

Jona City has designated an internal service fund as the single fund to account for its self-insurance activities. Most of the insured activities, such as the police department, fire department, and general government functions, are accounted for in the general fund. What is the maximum amount that can be charged to expenditure in the general fund related to the self-insurance activities?

During the current year, the Adams County Solid Waste Landfill, which is accounted for in an enterprise fund, installed wells designed to assist in the ground water monitoring process after closure of the landfill. The landfill has reached 40 percent of its capacity and is expected to continue to accept waste until 2019. The wells cost $80,000 to acquire and install. The appropriate entry to record the addition is a credit to Cash for $80,000 and an $80,000 debit to

In which of the following circumstances must an enterprise fund be used to account for the activity?

"Cash flows from operating activities" include which of the following as inflows

The amount the city's self-insurance fund can recognize as revenue is

The amounts reported in proprietary fund statements are generally the same as those reported in the government-wide statements because both sets of statements are on a full accrual basis of accounting.

The appropriate entry in the general fund to account for this transfer is a credit to cash for $500,000 and a debit for $500,000 to

The appropriate basis of accounting for the proprietary funds of a government is

In accounting for closure and post-closure landfill costs in an enterprise fund, a government does not necessarily have to "fund" the costs during the landfill's useful life; it merely has to report both an expense and a liability for them.

GASB Statement No. 34 mandates that governments report their cash flows from operations using the indirect method.

Asset retirement obligations are similar to must be recognized under which of the following circumstances:

Garfield County operates a solid waste landfill that is accounted for as an enterprise fund. At the end of 2016, the Landfill Enterprise Fund had a liability for landfill closure and postclosure care costs of $50,000. The county estimated the total costs associated with closing and monitoring the landfill as listed below. REQUIRED: (a) Calculate the estimated total current cost of postclosure care as of year-ends 2017 and 2018. (b) Calculate current period expenses for year-ends 2017 and 2018. (c) Prepare the required journal entries at year-ends 2017 and 2018 to recognize the current period expenses. Be sure to show all of your work.

Falmouth City owns and operates a mini-bus system which it accounts for in an enterprise fund. Prepare journal entries to record the following transactions, which occurred in a recent year. a) The mini-bus system issued $5 million of 8 percent revenue bonds at par and used the proceeds to acquire new mini-buses. b) As required by the bond covenant, the system set aside 1 percent of the gross bond proceeds for repair contingencies. c) The system accrued 6 months interest on the revenue bonds at year-end. d) The system incurred $30,000 of repair costs and paid for them with cash set aside for repair contingencies.

Internal service funds should be consolidated with other governmental funds in the government-wide statements.

The financial statements of a proprietary fund are prepared using the

As part of a service concession arrangement with a private firm involving operation of a city car park, a government agrees to incur certain future maintenance costs. If the present value of the consideration paid and to be paid to the government exceeds the present value of the maintenance costs to be incurred by the government, how, if at all, should the government report the "gain"?